Financial Insights for Women

If you are single, you know the job is yours. If you are married, you may not be able to defer the task to your husband. That’s because women tend to outlive their husbands. According to the Women’s Institute for Financial Education (www.wife.org), only one-third of women over 65 are married and on average women will survive their husbands by fifteen years. So, unless you and he prepare together in advance, odds are that you will face this task alone.

The challenge you face: You would probably like to maximize the amount your heirs get from the estate you've built. Failing to prepare wisely — or worse, failing to prepare at all — could cost your family thousands of dollars in taxes.

The whole idea of estate planning can sound complicated. It needn't be. The concept itself is fairly simple. The greatest challenge you face is deciding what you want to accomplish with your estate.

Start by considering the four goals of estate planning:

Control over who gets what. Within broad limits of the law, you can allocate the distribution of your assets pretty much as you wish. Remember, if you do not choose, the probate court in the state where you reside will and your heirs will have no say in how your estate is distributed. Worse, conflicts could tie up your estate in probate, possibly for years.

The two best tools to help you maintain control are an up-to-date will and trusts. Talk to a good estate planning attorney.

Conservation of assets. Make sure as little of your net worth as possible is used up by settlement costs. If you are not careful, your heirs could lose up to 55 percent of your estate, depending on its size and how asset ownership is arranged.

Fortunately, shrinkage can be reduced through trusts, lifetime gifts and other options. Life insurance can also be used to replace assets lost in estate shrinkage and create 'instant estates' for your heirs.

Liquidity. Some estate shrinkage is inevitable. As a result, your heirs will need cash to settle final expenses. If the money is not readily available, they may be forced to dismantle your estate and sell off assets—possibly at bargain basement prices—or dip into their own pockets. If income-generating assets must be sold, this could jeopardize a survivor’s future financial security. If there is a family business, it might have to be sold. Even then, chances are that it will be difficult to sell for a reasonable price under "distress sale" circumstances.

A common way to replace lost assets and provide adequate liquidity is through life insurance. Life insurance proceeds can provide instant cash, income-tax-free, when it is needed most.

Survivor income. To provide for your husband and/or dependent children. If your estate is significant and your children are grown, you may already have adequate assets set aside. Otherwise, once again, life insurance may be your best-choice option.

Regardless of your current age or estate size, you owe it to your family and yourself to address your estate planning needs.

Where to start: Your Securian advisor can help you identify your needs, as well as review your life insurance coverage to make sure you have an adequate amount to replace income and assets that could be lost due to estate shrinkage. Finally, your advisor can meet with your attorney to discuss your will and other asset ownership options to make sure your wishes are carried out.

Above all, do not ignore this issue. Many people believe that estate planning is about death. In reality, it is about providing for the loved ones who are left behind. Contact your advisor today. There is no cost or obligation.

This information should not be considered as tax advice. You should consult your tax advisor regarding your own tax situation.

Contact a Securian financial advisor or registered representative.

Last updated: Tuesday, March 18, 2008 2:46 PM